MicroStrategy Convertible Notes Added $100 Million for Bitcoin Investment

Key Points:

• MicroStrategy convertible notes used to invest in Bitcoin have been increased to $700 million.
• Notes are to be sold privately, with the option of an additional $100 million.
• Proceeds to fund Bitcoin purchases and general corporate use.

MicroStrategy, a leading business intelligence firm, has declared the pricing of its latest issuance of $700 million of 0.625% convertible senior notes, due in 2030.

MicroStrategy Convertible Notes Raised to $700 Million

This offering of MicroStrategy convertible notes surpasses the previously anticipated $600 million. The notes will be sold privately under Rule 144A to qualified institutional buyers.

The company has also granted initial purchasers the option to acquire up to $100 million in additional principal on the MicroStrategy convertible notes within a 13-day period. Pending customary closing conditions, the offering is set to conclude on March 8, 2024.

These unsecured senior debt notes will carry an interest rate of 0.625% per annum, payable semiannually. They will mature on March 15, 2030, unless repurchased, redeemed, or converted prior, with interest payments commencing on September 15, 2024.

Funds Allocated for Bitcoin Acquisition and Corporate Operations

The initial conversion rate stands at 0.6677 shares of MicroStrategy Class A common stock per $1,000 principal amount of notes, equating to an initial conversion price of about $1,497.68 per share, indicating a premium of approximately 42.5% over the last selling price reported on the Nasdaq Global Select Market.

Proceeds from the sale, estimated at approximately $684.3 million (or approximately $782.0 million if the initial purchasers fully exercise their option), will be utilized by MicroStrategy primarily for acquiring additional Bitcoin and general corporate purposes.

This move aligns with the firm’s ongoing strategy of investing in cryptocurrency. MicroStrategy’s stock has outperformed Bitcoin year to date in 2024, rising over 50% at the time of writing.